One of the realities that FP&A professionals need to realize is people tend to be too optimistic in their financial plans. People tend to expect higher revenues, lower expenses, or less time to recover the amounts of their investments. Psychologists label these expectations as optimism bias. As an accountant, I am guided by the conservatism principle.
In this recent interview with GTNews, Larysa Melnychuk sets out the fundamentals of FP&A, its vital role within the organisation, its international aspects and future FP&A trends to watch.
After her round of meetings with financial planning and analysis professionals across the globe, Larysa Melnychuk, managing director of the London FP&A Club, returned with plenty of stories and insights about the challenges they face.
In this blog, the author offers his insights on some of the challenges faced by practitioners in making sense of data and communicating it within organisations, and his ideas on how these shortcomings can be overcome. A few decades ago everything seemed so straightforward. When it came to planning and controlling businesses annual budgets were the only show in town. Things are very much different now.
The search for a “single version of the truth” and how to “make FP&A a trusted business advisory unit to the boardroom … like an internal dynamic Harvard/MIT unit” were among key trends identified by the London FP&A Board.
The inaugural full meeting of the London FP&A Board confined itself to detailing the attributes required of an FP&A professional and the evening’s roundtable discussion produced a set of best practice recommendations detailing the necessary skills and mix of different personalities that should go into building a successful FP&A team.